Inflation controlled, economy sees sign of recovery

Opening the report, Prime Minister Nguyen Tan Dung admitted that in the last three years, the shortcomings of the economy and negative impacts of growth-supporting policies have resulted in increasing inflation seriously impacting the stability of the macro-economy. Economic growth has slowed and production and people’s lives have faced numerous difficulties.

But, thanks to coordinated solutions, the macro economy has been stabilized and inflation has been put under control. The Consumer Price Index dropped from 18.13% in 2011 to 6.81% in 2012 and is estimated to be 7% this year against the set target of 8%. The economy has gradually recovered, with GDP increasing 5.6% a year for the last three years. In the last nine months, the number of newly established enterprises has increased 10.8% and more than 11,200 enterprises have resumed their operations.

Initial achievements in economic restructuring

Initial achievements have been recorded in economic restructuring including the restructuring of public investment, state-owned enterprises, finance, credit, and agriculture. Prime Minister Nguyen Tan Dung said:“With a focus on restructuring public investment, we adjusted the structure and mechanism of investment capital allocation, and mobilized resources for important projects and counter capital for ODA projects. The government has fine-tuned the mechanism of decentralization of investment management to ensure uniform management at the central level and strengthen the responsibility of localities and investors. In regard to financial and credit restructuring with a focus on commercial banks, the government has restructured credit organizations and has gained initial results. The banking system has been controlled and safety ensured. Weak banks have been restructured. The government has also focused on fine-tuning mechanisms and polices on reforming State-owned enterprise management”.

According to the Prime Minister, among the 15 targets set for 2013, 11 targets were surpassed, 2 targets were achieved and only 2 targets were missed. This achievement was due to great efforts by the political system, the Party, the army and the people despite economic difficulties.

9 major solutions to achieve high growth

The Prime Minister admitted uncertainty about the stability of the macro economy and controlled inflation because production remained difficult, and the economic restructuring and growth model revision remained slow. The fight against corruption and waste has not been effective. The Prime Minister said that Vietnam aims to achieve a GDP growth rate of 6% in the next two years, GDP per capita is expected to reach 2,200 to 2,300 USD by 2015, the Consumer Price Index is to increase by 7% per year and the poverty rate reduced 1.5 to 2 % per year. To this end, the government has introduced 9 key solutions: “The government persists in stabilizing the macro-economy, controlling inflation, and implementing a flexible monetary policy and a strict fiscal policy. The government will adjust the interest rate in line with the target of reining in inflation, increase proper the credit surplus and ensure the quality of credits. We aim to effectively manage the exchange rate, the forex market, the gold market, ensure the value of the Vietnamese dong, boost exports and control imports. The foreign currency reserve will be raised, while the capital and securities markets are strengthened. The Government will ask the National Assembly to raise the budget expense surplus to 5.3% of GDP for the 2013-2014 period and gradually reduce it starting in 2015”.

The government pledges to strengthen economic restructuring through the Master Plan on Economic Restructuring and plans and projects on sectoral and field restructuring. Prime Minister Dung:“Concerning investment restructuring with a focus on public investment, we aim to mobilize resources for important projects, ODA counter capital, land clearance and participating capital in Public Private Partnership projects. The government will increase investment for agriculture and new rural development, health care, education and disadvantaged areas. We will continue to comprehensively restructure credit organizations, especially weak commercial banks and state groups and corporations under the approved plan. The government will also strengthen agricultural sectors by shifting from outsourcing and processing into production and further participate in the global value chain”.

In addition, the government aims to strategically renovate institutions, human resource development and infrastructure development, strengthen the National Target Programs on Sustainable Poverty Reduction, prevent corruption, practice thrift and reduce waste.

The Prime Minister stressed the need to continue promoting external policies, effectively responding to the Party Politburo’s Resolution on deepening cooperation with partners, especially with neighboring countries, ASEAN members, traditional friends and the world’s powers. The Prime Minister closed his report by highlighting the importance of tasks to be accomplished. He said that under the leadership of the Party Central Committee, the Party, people, army and the whole political system need to join efforts to successfully fulfill the 2014 plan thus contributing to the success of the 5-year plan until 2015.